Zomato, the popular food aggregator platform, made headlines as it reported a consolidated profit after tax of Rs. 2 crore in Q1 of FY24. This marks a significant turnaround from the loss of Rs. 186 crore in the same period a year ago.
Impressive Revenue Growth
The Gurugram-based food delivery company witnessed a remarkable 71 percent year-on-year growth in revenue from operations, reaching Rs. 2,416 crore in Q1 FY24, up from Rs. 1,414 crore in the corresponding period last year.
Ebitda Turns Positive
Zomato’s adjusted earnings before interest, tax, depreciation, and amortization (Ebitda), including its quick-commerce arm Blinkit, reached a positive Rs. 12 crore for the first time. This is a significant improvement from the loss of Rs. 175 crore in the previous quarter (Q4 FY23).
Focus on Growth and Customer Base
The company aims to maintain profitability in the future, projecting over 40 percent year-on-year growth in adjusted revenue for the next few years. Zomato attributes this growth to improved execution, recovering demand, and the popularity of its membership program Zomato Gold.
Diversified Revenue Streams
Zomato’s food delivery business, with adjusted revenue of Rs. 1,742 crore in Q1, saw a 10 percent quarter-on-quarter increase in gross order value (GOV), reaching Rs. 7,318 crore. The average monthly transacting customers for this vertical grew to 17.5 million.
Success in Quick-Commerce and B2B Verticals
Blinkit, the company’s quick-commerce arm, turned contribution-positive during the quarter, with revenue reaching Rs. 384 crore. The business-to-business vertical, Hyperpure, also experienced a 126 percent YoY revenue growth, hitting Rs. 617 crore.
Unraveling Profit After Tax
While Zomato reported a profit after tax of Rs. 2 crore, closer examination reveals that a critical tax provision contributed to this result. Auditors recognize deferred tax assets when a company starts reporting profit and shows reasonable certainty of future profits.
Zomato’s shift to profitability reflects its operational efficiencies and strategic moves, positioning it well in India’s competitive food delivery market. With an eye on continued growth and customer satisfaction, Zomato aims to sustain its profitable trajectory in the coming years.
